9/16/2006

In November, [California] voters will be asked to decide on Proposition 90, the so-called "Protect Our Homes Act" - a property-rights initiative that would amend the state Constitution to limit the use of eminent domain

The initiative would make it impossible for cities or counties to seize land in order to eventually transfer the property to a different private owner, such as a shopping mall developer.

It would also require public agencies to compensate property owners for "regulatory takings" - times when a government decision prevents a property owner from developing or using land. This could happen, for example, when a city puts land off-limits to developers in order to protect the environment.

And though supporters deny it, two nonpartisan organizations - including the state Legislative Analyst's Office - say the initiative may affect more than land. It might also cover intellectual property, such as patents affected by government actions.

Proponents almost exclusively talk about stopping cities from colluding with developers to take the homes and businesses of small property owners. Prop. 90, they say, is a reaction to the June 2005 U.S. Supreme Court ruling that allowed a Connecticut city to seize the home of Susette Kelo and others. The city wanted a different owner to build a hotel, condominiums and commercial space on the land.

Supporters of the initiative also point to what they say are local abuses of governments' use of eminent domain. For example, the city of Oakland last year seized two auto shops where a developer wanted to build a condominium project that will include some below market-rate housing.

Prop. 90 would require state and local agencies to use land they acquire through eminent domain for a stated public use, such as a prison or school. Under the initiative, governments would still be able to use eminent domain in some cases to abate nuisances such as blight or environmental problems.

City redevelopment officials say they seldom use eminent domain powers and that Prop. 90 would hamper efforts to revitalize blighted urban areas. Some opponents of the measure agree that some reform of eminent domain rules may be needed to prevent rare abuses, but they believe Prop. 90 goes too far.

Groups such as the California League of Conservation Voters say the initiative could increase the price that governments would have to pay to build things like roads and schools because of the new costs of reimbursing property owners. They also argue it could hamper cities' ability to regulate where development should happen.

The state Legislative Analyst's Office concluded the measure "could have a major effect on future state and local government policymaking and costs."

Under the initiative, governments would have to pay landowners if they set limits on how tall buildings or homes could be built. The analyst's office said the initiative could force governments to pay landowners after establishing limits on pollution levels or high apartment prices.

Yes on Prop. 90 campaign spokesman Kevin Spillane said the legislative analyst's report was full of "wild-haired distortions" and pointed to overwhelming public support for curbing eminent domain powers.

A Field Poll released last month showed Prop. 90 ahead, especially among Republicans, although only about 28 percent of voters were aware of the initiative. Prop. 90 has been endorsed by the California Republican Party and 42 Republican state legislators.

The most high profile Prop. 90 supporter is New York real estate investor Howie Rich, a Libertarian linked with organizations that have given millions of dollars to as many as 19 initiative drives under way this year in a dozen states. Most seek to expand property rights or limit government spending; some have been disqualified for various reasons.

"This is an ideological thing," Rich said. "I believe that property rights in many respects have been taken away from many property owners."

Organizations that Rich leads have given $1.77 million so far to the Yes on Prop. 90 campaign. In addition, an early contribution of $600,000 came from Montanans in Action, a new political group that has not disclosed its donors. Another $200,000 came from a longtime funder of the libertarian Reason Foundation think tank.

On the other side is a coalition of opponents, including cities and counties, environmental groups and the banks that underwrite redevelopment bonds. Collectively they have given at least $1.5 million to fight Prop. 90, according to the most recent campaign filings.

The biggest chunk - $755,000 - came from municipalities, primarily through the League of California Cities. Environmental groups, led by the Nature Conservancy, have given more than $300,000. The California Public Securities Association, which represents banks involved in municipal finance, gave $400,000, the single biggest donation.

James Cervantes, the association's chairman, accused Prop. 90's backers of being "intellectually dishonest" for hyping the eminent domain angle and downplaying the wider potential impacts.

Spillane countered that the opposition is driven largely by people who benefit from abusing eminent domain.

"Their campaign is funded by people who make money from taking your home or small business," he said.

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